For those of you who think accounting is boring and complicated, well, I suspect you are in large company with that opinion. And I’m not going to try to change your opinion, even though I personally think aspects of accounting are interesting.
But I do want to show you some accounting that is quite interesting. And tell you why.
And I think you’ll agree with me when I’m done. Now that’s some brave talk, don’t you agree.
In any event, just look at the accounting entries in the illustration above. Can you guess what they are about?
If you own Apple Stock, or want to own Apple stock, they are incredibly interesting.
Because these are the accounting entries (known as journal entries) that someone in the accounting department just made recently. And here is what they say – in plain English — not accounting jargon.
“The board of Apple looked at the big pile of billions of dollars they have laying around from all their profits and decided to give about 3 billion (yes, that’s with a B) to the people that have owned Apple stock the past three months.”
Yup – that’s what all of that says.
And Apple has some much cash laying around, and such good prospects of making oodles (not an accounting term) of money in the next three months, that they will probably do the same thing all over again.
Now, who says accounting isn’t interesting. Especially if you own Apple stock and are about to get a nice dividend check in the mail.
By the way, Apple seems to be priced right for buying in my opinion – so I put my toe in the water and bought a few shares.
To you health and prosperity – John Roberts
Here’s a stock buying tip for you.
Find out if there is any insider buying going on when you are thinking about buying a stock.
Many forms of insider buying are completely legal and this is another investment clue. You can improve your odds of successful investing by knowing when it’s happening.
Insiders sell and buy shares of their company all of the time.
Now there are many reasons why insiders might sell, i.e. they think the stock might go down, or they have a child’s college tuition coming due or they just need the cash.
But there’s only one reason why insiders buy stock in their company. And that’s because they Read the rest of this entry »
But that’s not the only reason I sold. I sold because it had dropped below a limit I had set in the past. In other words, I knew when I bought the stock what price I would sell it at if it fell.
This is key to investment success. Because it keeps you from taking a small loss and turning it into a big loss. And I use a special method that often allows me to make a profit when the stock starts dropping.
So let me ask you a question. Do you Read the rest of this entry »
Take a look at this chart. It’s for a stock, American Capital Agency (AGNC) that I’ve been invested in since 2010. It’s been very profitable. But it has now gone below the trailing stop, so I will sell it today if it doesn’t turn around.
But I will be selling at a profit — even though the stock has gone down.
Much more on this later. And I’ll let you know what I did today. Did I sell or hold. Did it recover or not.
To your Health and Prosperity – John Roberts
When the stock market is going great, and most of your stocks are up, it’s all too easy to get carried away with enthusiasm and get reckless. Which is what most investors do in this situation.
Why would they do this? Why would you do this?
I’ll tell you why. Because it just feels like the good times will never end. And you’re getting reinforcement on that “good times feel good” story from everywhere.
The news channels talk about how great the market is. Their experts start making extraordinary predictions about how much higher it is going. There are effusive headlines the newspapers. And even a few of your friends, who have shown no previous interest in the market are talking about getting in. And every day your portfolio seems to be worth more.
But when you find yourself in this happy situation, there are three things you must do or you are going to find yourself in an unhappy losing situation in the future.
First, try to Read the rest of this entry »
There are many advantages to owning dividend paying stocks. One of these you may not have thought of is how they can protect you from bad management decisions.
You see, the CEO’s and top management of corporations are people too, which means they make mistakes and can get caught up in emotion and ego, rather than rational reasoning, just like the rest of us.
Which can lead to bad management decisions.
Which can lead to you losing money in their company stock.
But by knowing they have to pay dividends to you and me as owners, every quarter, they have to keep focused on making a profit by spending the company’s money wisely. This is exactly what you and I, as stock investors and business owners, want them to do.
So what kind of bad decisions can dividend paying stocks protect us from?
I would say we’re protected from a loss of Read the rest of this entry »
You’ve probably thought about retiring sometime in the future. And perhaps you’ve been saving and investing toward that goal — that time when you no longer go to work every day.
But if you’re like many people you only have a vague idea about how all of that works. Sure, you’ve seen all the complicated retirement calculators, future cost of living formulas, anticipated expenses questionnaires and other nebulous projections that all of the retirement articles seem to go into.
And these have their place in retirement planning.
But let’s get real basic and concrete about this.
When you retire, just how are you going to pay your bills?
Or put another way, how are you going to get paid?
Here’s an easy way to think about this that I’ll bet you already Read the rest of this entry »
As a follow-up to our series on investing in silver, may I make a suggestion?
And that is to get to know your local coin dealer. It’s a smart move, and I think you’ll find the experience rewarding and enjoyable.
I visit Orlando Coin Exchange just about every Saturday. And Jason, Jerry and Harry are always ready to help with any questions I might have about silver, gold and coins in general. They’re also a congenial lot, with a great sense of humor.
But don’t let that fool you. They’re serious about the coin business and really know their stuff.
Here’s the thing. If you know your local coin dealer, it’s simple to Read the rest of this entry »
Many people have run for the “perceived” security of owning bonds since the stock market crash in 2008. But bonds aren’t quite as safe as the general perception out there.
Let’s look at two bonds and you tell me how much you would pay for them. First, there’s Bond-A. Let’s say you paid $1000 for it and it pays $50 a year in interest. Ok – that’s not bad so you are feeling pretty good about yourself for the moment.
Then along comes Bond-B. You can pay$1000 for it and it pays $100 in interest every year.
Which bond do you want to buy – Bond-A or Bond-B?
I’m thinking Bond-B, aren’t you? Because it pays twice as much interest for the same $1000 investment. Everyone will want Bond-B, actually.
Which means no one will want Bond-A. That is to say no one will want to spend $1000 to buy Bond-A.
So is Bond-A worthless? Read the rest of this entry »
For all of the drawbacks a 401k has as an investment, I still think people should invest in them for two reasons.
The first reason is that it’s free money being given to you by the company you work for. And the free money can be substantial.
A typical 401k plan might be something like this. If you contribute 5% of your earnings to the plan, the company will match taht and put another 5% in the plan for you. That’s like getting a 5% raise.
Given that the average raise these days is around 2%, that is, if companies are awarding raises at all, that is two and a half years of raises that you can Read the rest of this entry »